TITLE:  American Fuel Cell & Coated Fabrics Company, B-293001; B-293020, January 12, 2004
BNUMBER:  B-293001; B-293020
DATE:  January 12, 2004
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American Fuel Cell & Coated Fabrics Company, B-293001; B-293020, January 12,
2004

   DOCUMENT FOR PUBLIC RELEASE                                                
The decision issued on the date below was subject to a GAO Protective      
Order.  This version has been approved for public release.                 

   Decision
    
Matter of:   American Fuel Cell & Coated Fabrics Company
    
File:            B-293001; B-293020
    
Date:              January 12, 2004
    
Robert A. Klimek, Esq., Klimek, Kolodney & Casale, for the protester.
Cyrus E. Phillips, IV, Esq., for Engineered Fabrics Corporation, an
intervenor.
Benjamin G. Perkins, Esq., Defense Logistics Agency, for the agency.
Edward Goldstein, Esq., and Christine S. Melody, Esq., Office of the
General Counsel, GAO, participated in the preparation of the decision.
DIGEST
    
Agency reasonably found protester's proposal unacceptable because it
failed to meet the agency's delivery schedule requirements, which were
clearly identified during the course of discussions with protester.
DECISION
    
American Fuel Cell & Coated Fabrics Company (AMFUEL) protests the Defense
Logistics Agency's (DLA) award of two contracts to Engineered Fabrics
Corporation (EFC) under request for proposals (RFP) Nos. SP0475-03-R-3379
and
SP0475-03-R-3377 for aircraft fuel tanks (for brevity's sake, we refer to
the solicitations in this decision by the last four digits of each). 
AMFUEL argues that the awards were improper because they were made on the
basis of an unstated evaluation factor.
    
We deny the protests.
    
Solicitation No. 3379, issued on May 7, 2003, and No. 3377, issued on May
9, provided for the award of fixed-price, indefinite-quantity contracts
for a base period of 1 year with four 1-year options.  The solicitations
were for the supply of aircraft fuel tanks, National Stock Number (NSN)
1560-00-981-6138 and NSN 1560-00-739-8342, respectively.  Solicitation No.
3379 listed an overall minimum quantity of 69 tanks, a minimum of 14 tanks
per delivery order, and a maximum quantity per delivery order of 97, and
indicated that the tanks were to be delivered not less than 274 days after
the placement of a delivery order.  RFP at 2, 6.  Solicitation No. 3377
listed an overall minimum quantity of 59 tanks, a minimum of 11 tanks per
delivery order, and a maximum quantity per delivery order of 81, and
indicated that the tanks were to be delivered not less than 86 days after
the placement of a delivery order.  RFP at 2, 8.
    
Award under each solicitation was to be made to the offeror whose proposal
conformed to the terms and conditions of the solicitation and represented
the *best value* to the government.  The best value determination was to
be based on a comparative assessment of *prices, past performance, and the
other evaluation factors identified elsewhere in this solicitation.*  RFP
S: M10G.  *Delivery schedule and current inventory status* was listed as a
factor that *may be considered in the trade-off process* for purposes of
making a final award decision.  RFP S: M10G. 
    
Two offerors, AMFUEL and EFC, submitted proposals by the amended closing
date and both offerors' proposals took exception to the solicitation's
delivery requirements.  With regard to solicitation No. 3379, AMFUEL
offered to deliver two tanks per month starting 150 days after receiving
each delivery order.  AMFUEL's Proposal at 6.  EFC offered a phased
delivery of 12 units per month starting 84 days after receiving each
delivery order.  EFC's Proposal at 6.  With regard to solicitation No.
3377, AMFUEL offered to deliver two tanks per month starting 90 days after
receiving each delivery order.  EFC offered a phased delivery of 11 tanks
per month starting 84 days after receiving each delivery order.    
    
The contracting officer reconsidered delivery requirements for both
solicitations.  As to solicitation No. 3379, the contracting officer
determined that phased delivery of
seven tanks per month beginning 90 days after receipt of a delivery order
would accomplish delivery in the time required, and that she would enter
into discussions with AMFUEL regarding a delivery schedule that would meet
the government's revised requirements.  Because EFC's proposed delivery
schedule met the government's revised requirements, the contracting
officer indicated that, with regard to delivery schedule, EFC would simply
be advised during discussions that its phased delivery schedule was
acceptable.  AR, Tab G, Pre-Negotiation Briefing Memorandum, Aug. 8, 2003,
at 4.
    
Subsequently, the contracting officer sent AMFUEL a letter indicating that
negotiations were opened regarding solicitation No. 3379 and in the letter
stated:
    
AMFUEL's proposed phased delivery schedule does not meet the requirements
of the government as stipulated in the solicitation.  The following phased
delivery schedule is considered acceptable:
    
a.  Phased delivery of 7 units per month beginning 90 days after receipt
of order.
    
AR, Tab H, Letter to AMFUEL, Aug. 22, 2003.
    
Responding to the agency's letter in what it termed a *counter-offer,*
AMFUEL revised its prices and stated that it could *commit to delivery of
3-4 units per month 150 days after receipt of award.*  AR, Tab I, AMFUEL's
Letter to Agency, Aug. 26, 2003.  AMFUEL subsequently committed to
delivery of four tanks per month.  See AR, Tab J, E-mail Message from
AMFUEL, Sept. 5, 2003.
    
The contracting officer also reevaluated the government's delivery
requirement for solicitation No. 3377 and determined that there was a need
to revise the requirement *to reflect a realistic schedule for phased
deliveries.*  AR, Tab F, Pre-Negotiation Briefing Memorandum, Aug. 21,
2003, at 4.  The new requirement was identified as *a phased delivery
starting no later than 120 days after receipt of order with final delivery
within 360 days of order.*  Id.  Because EFC's proposed phased delivery
schedule satisfied the revised requirement, the contracting officer
determined that negotiations with EFC concerning its delivery schedule
were not necessary; negotiations with AMFUEL, however, were deemed
necessary because AMFUEL's proposed delivery schedule did not satisfy the
revised requirement.
    
As a consequence, the agency sent AMFUEL a letter notifying it that
negotiations were opened regarding solicitation No. 3377 and stating:
    
The government has revised the delivery requirement to a phased delivery
starting no later than 120 days after receipt of order with final delivery
of the maximum order quantity for the base contract period (81 each)
within 360 days.  AMFUEL's proposed phased delivery schedule does not meet
the government's original or revised delivery requirements.  The following
phased delivery schedule is considered acceptable:
    
a.  Phased delivery of 8 tanks per month starting 90 days after receipt of
the order.
    
AR, Tab G, Letter to AMFUEL, Aug. 26, 2003.
    
AMFUEL responded to this letter with its *counter-offer,* in which it
revised its prices and indicated that it would commit to a delivery
schedule of three to four tanks per month starting 120 days after receipt
of award.  AR, Tab H, AMFUEL's Letter to Agency, Aug. 28, 2003.  As with
solicitation No. 3379, AMFUEL subsequently committed to delivery of four
tanks per month.  AR, Tab I, E-mail Message from AMFUEL, Sept. 5, 2003.
    
In making its award determinations under the subject solicitations, the
agency considered AMFUEL's revised delivery schedules for each
solicitation, but determined that they were still unacceptable because
they did not meet the government's revised delivery requirements.  As a
result, the agency made award to EFC, which offered satisfactory delivery
schedules, notwithstanding the fact that EFC's prices were higher than
those offered by AMFUEL.  In its notices of award, the agency informed
AMFUEL that its delivery schedules did not satisfy the government's
requirements.
    
The protester argues that the awards to EFC were improper because the
agency introduced an unstated evaluation factor, delivery schedule, when
it evaluated proposals.  According to AMFUEL, pursuant to the terms of the
solicitations, award was to be made based on a comparative assessment of
price and past performance only. 
    
The express language in the solicitations at issue does not support
protester's assertion that delivery schedule was an unstated evaluation
criterion.  As set out above, section M10G in both solicitations clearly
provided that *delivery schedule and current inventory status* was a
factor that could be considered in the agency's best value trade-off
process. 
    
The protester also challenges the agency's conclusion that AMFUEL's
proposals were unacceptable because they failed to meet the government's
minimum delivery schedule requirements.  AMFUEL argues that, to the extent
the agency intended to impose delivery requirements in the letters sent to
AMFUEL after receipt of initial proposals, those requirements were not
part of the solicitations because the agency never issued formal
amendments incorporating them into the solicitations.[1]
    
Because AMFUEL was clearly put on notice during discussions that its
proposed delivery schedules were unacceptable, and because the agency
informed AMFUEL, also during discussions, of what delivery schedules the
agency would find acceptable, we think that formal amendments to the same
effect were not necessary.  See Avitech, Inc., B-214749, Sept. 17, 1984,
84-2 CPD P: 297 at 2-3.[2]  While AMFUEL characterizes the delivery
schedules identified by the agency during discussions as merely
negotiating positions, the discussions letters clearly advised that the
specified delivery schedules were minimum requirements.  It simply was not
reasonable for AMFUEL to assume that it could submit what it characterized
as counter-offers, which again did not comply with the delivery schedules
that the agency clearly identified as acceptable, without risking that its
proposals would be regarded as unacceptable.   Delivery is a material term
of a solicitation and award generally cannot be made on the basis of a
proposal that takes exception to a required delivery schedule.  Logitek,
Inc., B-238773, July 6, 1990, 90-2 CPD P: 16 at 3-4, recon. denied,
B-238773.2, Nov. 19, 1990, 90-2 CPD P: 401.  Because AMFUEL's revised
proposals failed to include delivery schedules that satisfied the
government's minimum requirements, the agency properly found AMFUEL's
proposals unacceptable.
    
The protests are denied.
    
Anthony H. Gamboa
General Counsel
    
    
    

   ------------------------

   [1] In its initial protests, AMFUEL asserted that the solicitations as
originally issued did not contain a required delivery schedule because
they merely stated that delivery of the specified quantities was to occur
in *no less than* a certain number of days (274 under RFP No. 3379 and 84
days under RFP No. 3379).  According to AMFUEL, this phrase indicated only
that any delivery after either 274 or 84 days would be acceptable, and did
not specify a minimum required delivery schedule.  The record shows that
the agency in fact intended the days specified to be, in effect, the
latest dates by which deliveries could be made, i.e., that deliveries
could be made not *later* than, rather than not *less* than, the specified
number of days.  As the protester points out, the language in the
solicitations is at best unclear, since on its face it suggests that the
agency is merely specifying the earliest, rather than the latest, date by
which deliveries are to be made.  The interpretation of this language is
not dispositive of the protest, however, since, as discussed above, the
agency changed its delivery requirements after receipt of initial
proposals, as reflected in the letters sent to AMFUEL.
[2] In support of its assertion that the agency was required to amend the
solicitation in order to revise the delivery schedule requirement, AMFUEL
cites our decision in Symetrics Indus., Inc., B-274246.3 et al., Aug. 20,
1997, 97-2 CPD P: 59.  AMFUEL's reliance on Symetrics, however, is
misplaced because in Symetrics, unlike the subject case, the government
did not disclose its revised requirements during discussions.